From Information to Intelligence:The Power of Social Media to ManageFinancial RiskMay 23, 2013Scott SchneidermanPrincipalInnovative Analytic SolutionsAveshka, Inc.
Introduction“One emerging area of concern… is the use ofsocial media to support fraudulent schemesbringing what are called boiler room scams intochat rooms, Facebook pages, Twitter feeds, andyour inbox.”SEC Chairman Elisse WalterApril 1 2013
Financial Risks AboundEnronAdelphiaTycoQWestBernard MadoffSociete GeneraleMF GlobalSAC CapitalJP Morgan Leak20132001Rogue TradingPonzi SchemesInsider TradingLeaks or Loss of IPAccounting FraudPump-&-Dump SchemesIdentity TheftThe financial risk environment hasbecome more varied and complexover the past decade.
A Network View of Financial RiskWe use relationship mapping and cognitive modeling tovisualize complex event relationships and identify previouslyunknown or hidden events, entities, and interactions.
FraudNetworkNetwork Complexity Can VaryFinancial risks exist across a spectrum of network complexity.The more complex the network, the greater the opportunities fordetection and interdiction.LonewolfRogue TradingLeaks or Loss of IPPump-&-Dump SchemesInsider TradingAccounting FraudPonzi Schemes
Social Network and OS Indicators• Frauds arise from business and social networks• Social Media and OS indicate potential relationshipsTraditional SocialMedia Sources
Social Media and OS CollectionNew technologies and techniques allows an analyst to query data frommultiple databases rapidly and comprehensively to provide informationawareness and reveal hidden relationships
Common IndicatorsFraudNetwork“Trusted”RelationsOff-the-BooksEnablersFrontCompaniesSerialFraudstersOff-the-BooksBeneficiariesFraud networks have common risk factors that can inform due diligenceassessments or investigations.
Aveshka conducted a 1-week study of the company tofind relationships for further investigationSwiss investment bank provides partial or incompletenames of two companies and two individualsAveshka hired to investigate one of the largestbankruptcies in Swiss historySwiss Case StudyAveshka-provided intelligence is supporting the recoveryof > $10 million
From Information to Intelligence13In summary, social media monitoring and analysis canhelp organizations manage financial risk leading to:InformedInvestmentDecisionsProtection ofIPTime SavingThroughAutomationProactiveBrandManagement